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Credit to Private Sector Rises to N15.268tn in February

01 Apr 2013

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MD,  Keystone Bank, Mr. Phillip Ikeazor


By Obinna Chima

The flow of credit from commercial banks to the private sector, which had been on the decline in the past few months, increased slightly by 0.90 per cent to N15.268 trillion year-on-year in February 2013.

According to data compiled from the Central Bank of Nigeria’s (CBN’s) website at the weekend, the amount represented an increase by N137 billion, compared to the N15.131 trillion recorded in January 2013.

Also, the central bank’s money and credit statistics showed that narrow money (M1), which includes all physical monies such as coins and currency along with demand deposits and other assets held by the central bank, increased to N6.928 trillion in February, as against the N6.940 trillion realised in January.

In the same vein, broad money (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts also , climbed to N15.562 trillion in February, from N15.169 trillion in January.

According to the apex bank, currency in circulation declined to N1.437 trillion in February, from N1.457 trillion as at January, just as Net Foreign Assets increased to N9.630 trillion in the month under review, from N9.302 trillion the previous month. Similarly, Net Domestic Assets climbed to N5.932 trillion, from N5.932 trillion.

NIBOR Movement
The Nigerian Interbank Offered Rates (NIBOR) decreased to an average of 11.22 per cent on the average on Friday, compared to the 11.94 per cent it attained the preceding Friday.  This was largely attributed to inflow of funds into the system, especially as part of funds from the Federation Account Allocation Committee (FAAC), funds from payment of salaries and other benefits to public sector workers at the end month passed through the system.

As a result of that, data made available by the Financial Market Dealers Association (FMDA) showed that while the Call (Overnight) tenor dropped to 10.29 per cent on Thursday, from 10.75 per cent the preceding Friday, the 7-day tenor also fell to 10.54 per cent on Thursday, from 11.12 per cent the preceding Friday. Similarly, just as the 30-day tenor declined to 10.92 per cent last Thursday, from 11.54 per cent on the last trading day of the preceding week, the 60-day tenor also dropped to 11.25 per cent, from 11.96 per cent. The interbank market did not open last Thursday and today because of the public holiday declared in commemoration of the Easter celebration.

Forex Market
The Central Bank of Nigeria (CBN) met all the demand for the United States dollars at its regulated Wholesale Dutch Auction System (WDAS) last week. The apex bank offered a total of $600 million last week, out of which only $576 million was purchased by dealers. The Bank had sold a total of $580 million the preceding week. However, the naira appreciated marginally by one kobo at the WDAS as it closed at N155.75 to a dollar, higher than the N155.76 it was the preceding week. At the interbank segment of the foreign exchange market, the naira also leapt by 26 kobo to close at N158.40 to a dollar last Thursday, higher than the N158.66 to a dollar it went the preceding Friday. At the parallel market, the naira also sold at N160.50 to a dollar, according to the FMDA.


AMCON 
The Asset Management Corporation of Nigeria (AMCON) last week said it is considering floating a dollar denominated bond to fill its refinancing gap.


To this end, the corporation met with debt investors at a non-deal road show held in London to sensitise them on its plans. The proposed instrument would enable AMCON fill a N5 trillion refinancing gap, which was created by its acquisition of non-performing loans (NPLs).

AMCON’s spokesperson, Mr. Kayode Lambo, confirmed this.
Lambo said: “We are having a road show and management has said that this is one of instrument on the table. We have several options we are considering and this is just one of the.” The ongoing road show is the second leg of the tour as the corporation had visited the United States last week.

Commission on Turnover
The CBN last week outlined plans to gradually phase-out the   Commission on Turnover (COT) charged current account by 2016. Specifically, the apex bank directed all banks to reduce COT from its current rate of N3 to N2 by 2014, N1 by 2015 and   banks are not expected to charge for COT on current account transactions by 2016. This formed part of the banking sector watchdog’s “Revised Guide to Bank Charges,” dated March 27, 2013, a copy of which was posted on its website. The 36-page document, according to the CBN, would become effective from April 1. It explained that COT applies to customer-induced debit transactions on current account, even as it warned commercial banks not to charge COT on “returned outward clearing cheques, reversal on transactions and all bank-induced debits.”

Keystone Bank
Keystone Bank Limited last week said that its services had recorded significant improvement due to its deployment of top banking technology software from IBM. Managing Director/Chief Executive Officer, Keystone Bank, Mr. Phillip Ikeazor, said the financial institution had deployed a range of IBM software and hardware systems and technology solutions that enabled the bank to significantly upgrade its computing and service delivery capabilities. Ikeazor revealed that the bank’s back-end operational processes had significantly improved to higher efficiency levels.


“The new IBM systems deliver over 100 per cent increase in process performance and have achieved significant reduction in operating costs for the bank. Within the first month of implementing the IBM solution, the bank’s end-of-day processing time for its daily customer transactions reduced from between seven to eight hours to less than three hours,” Ikeazor explained.


Diamond Bank Opens UK Subsidiary
Diamond Bank Plc last week said it has been granted approval by the Financial Services Authority (FSA) to operate a bank in the United Kingdom. Group Managing Director/ Chief Executive Officer, Diamond Bank, Dr. Alex Otti expressed satisfaction over the feat. According to Otti, the international subsidiary would offer the financial institution opportunity to offer wholesale financial services, including facilitating international trade to new and existing clients. “This approval also provides a unique opportunity for Diamond Bank to establish its presence in London, which is a hub for finance and banking activities in Europe,” the Diamond Bank boss added.


MFBs & Mortgage Institutions
The CBN last week announced the extension of the deadline for compliance with the revised microfinance policy regulation and supervisory framework for Microfinance Banks (MFBs) from December 31,  2012 to December 31, 2013.
The was just as the apex bank also revealed that the compliance with the revised guidelines for Primary Mortgage Banks (PMBs) has been moved from April 30, 2013 to December 31, 2013.
The circular for MFB operators explained that the decision extend the deadline was “to allow more time for capital raising and business combination options towards meeting the capital requirements for each category of MFB and for rationalising the existing branches/cash centres, etc., where necessary.”
On the other hand, the circular for PMBs said that the extension was to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling highlighted in an earlier circular dated 14thDecember, 2012 issued by the banking sector regulator.

Union Bank
Union Bank last week said it is not interested in acquiring any bank in the nearest future but to deliver best services possible to customers. Group Managing Director of the bank, Mr. Emeka Emuwa pointed out that the long-term goal of the bank is to be “big, strong and reliable” like its tagline of many years.
“When you mention the name Union Bank, one of the first things that comes to people’s minds is ‘Big, Strong, Reliable’ – our tagline of many years,” said Emuwa. He added: “Indeed, Union Bank was once all these things. Our long-term goal is that Union Bank will be all three again – big, strong and reliable. But for today, our focus is on being reliable.” Similarly, in terms of human capital, Emuwa said that the workforce would be strengthened and skills upgraded.

Tags: Featured, Nigeria, Business, Phillip Ikeazor, Keystone Bank

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